Multitudes of bank clients are currently experiencing a significant shift in their financial accounts
Starting on October 7, 2025, stricter controls on transfers will be introduced in the European Union through a new EU regulation on payment security. This regulation, known as the "Verification of Payee" (VoP) measure, mandates that when making SEPA or SEPA Instant Payments within the EU, banks must perform a name-IBAN match check [2][4].
The scope of this regulation applies to all SEPA payments (including instant payments) within EU member states. It automatically applies for payments initiated in certain bank platforms and can also be opt-in for file payments [2]. The purpose of this regulation is to reduce errors in payments and mitigate fraud risks by confirming the identity linked to the IBAN before the transaction completes [2][4].
Upon entering payment details, a real-time verification compares the payee name entered by the sender against the name associated with the IBAN at the bank receiving the payment. The system provides feedback of match, partial match, or no match. Based on this, users can decide how to proceed [2].
This regulation aims to make cross-border Euro payments safer and more reliable, potentially reducing losses from mistaken or fraudulent transfers. However, it introduces additional verification steps that may require adjustments in banking and corporate payment systems starting October 2025 [2][4].
Some banks will require active consent for the real-time transfer process. Until October 7, 2025, an objection to the new regulations is possible. From 2027, the regulation will apply to all EU member states [3].
The regulation initially applies to the Eurozone, a group of 20 EU member states that use the euro as their official currency. Many banks are likely to use a traffic light system for the new verification: green for exact matches, yellow for minor discrepancies, and red for potential fraud warnings [1].
It's important to note that false alarms can occur due to factors like a missing special character, an additional first name, or a company name abbreviation. To address this, banks are encouraged to minimise the complications caused by such factors [1].
Real-time transfers can be initiated from any checking account with no extra charges. If the light turns red, the transfer will still be possible, but at the customer's own risk [1].
Starting October 7, 2025, real-time transfers within the EU will also be possible, taking only 10 seconds [5]. This new feature will significantly improve the speed and efficiency of cross-border transactions within the EU.
References: [1] European Central Bank. (2023). New EU payment security regulation: What it means for you. Retrieved from https://www.ecb.europa.eu/paym/sepa/instant/html/index.en.html [2] European Payments Council. (2024). Verification of Payee (VoP) – A new requirement for SEPA payments. Retrieved from https://www.europeanpaymentscouncil.eu/standards-and-services/sepa/sepa-instant-payments/verification-of-payee-vp.html [3] European Commission. (2023). Strengthening the EU's payment system. Retrieved from https://ec.europa.eu/info/business-economy-euro/banking-and-finance/payment-and-transfers/strengthening-eus-payments-system_en [4] Financial Times. (2025). EU to introduce new payment security regulation. Retrieved from https://www.ft.com/content/56462296-b64a-494a-b3a2-893e39c1b4d9 [5] European Payments Council. (2025). SEPA Instant Payments: A game changer for cross-border transactions. Retrieved from https://www.europeanpaymentscouncil.eu/standards-and-services/sepa/sepa-instant-payments/sepa-instant-payments.html
In the European Union, starting from October 7, 2025, a new regulation on payment security will be enforced, which includes stricter controls on transfers through SEPA or SEPA Instant Payments [5]. This regulation is aimed at reducing errors in payments and mitigating fraud risks, thus ensuring smoother and safer business and finance transactions within EU member states [2]. To achieve this, banks must perform a real-time name-IBAN match check before completing transactions, which will verify the identity linked to the IBAN [2].
